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Iraq’s Kurdistan Works to Establish Two Oil Firms as Erbil-Baghdad Tensions Rise

A picture shows a view of the area around the citadel of Erbil, the capital of the autonomous Kurdish region of northern Iraq, as dust engulfs the sector on May 24, 2022. (AFP)
A picture shows a view of the area around the citadel of Erbil, the capital of the autonomous Kurdish region of northern Iraq, as dust engulfs the sector on May 24, 2022. (AFP)
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Iraq’s Kurdistan Works to Establish Two Oil Firms as Erbil-Baghdad Tensions Rise

A picture shows a view of the area around the citadel of Erbil, the capital of the autonomous Kurdish region of northern Iraq, as dust engulfs the sector on May 24, 2022. (AFP)
A picture shows a view of the area around the citadel of Erbil, the capital of the autonomous Kurdish region of northern Iraq, as dust engulfs the sector on May 24, 2022. (AFP)

Iraq's Kurdistan Regional Government (KRG) is working to establish two oil firms, the latest move in the battle between Erbil and Baghdad to control the oil sector in the semi-autonomous region.

The KRG's new oil firm KROC would specialize in oil exploration, while the second - KOMO - would focus on oil exports and marketing from the semi-autonomous region, a spokesperson said in a statement on Friday.

The regional government has presented the idea and discussed it with the federal government in Baghdad recently, the KRG spokesperson said in a statement.

The statement follows months of disputes between Erbil and Baghdad after a February federal court ruling that deemed the legal foundations of the Kurdistan region's oil and gas sector unconstitutional.

The oil ministry in Baghdad has since made fresh attempts to control revenue from the Kurdistan region, including summoning seven firms operating there to a commercial court on May 19. The firms were Addax, DNO, Genel, Gulf Keystone, HKN, Shamaran and WesternZagros.

The commercial court sitting has been postponed twice as some of the representation for these international oil firms did not have power of attorney, several sources told Reuters. The court session is due to resume on Monday, June 20.

As well as announcing plans to establish its own oil company in the Kurdistan region, the Iraqi oil ministry has ordered international lead contractors and subcontractors through Basrah Oil (BOC) and Iraq's national oil firm (Inoc) to pledge not to work on contracts or projects there.

Through letters sent on June 7 and 12, the firms were given three months to terminate existing contracts or projects in the KRG oil sector or face being blacklisted, according to two sources familiar with the matter.

The oil ministry is using two law firms - Vincent and Elkins and Cleary Gottlieb Steen and Hamilton - to help with gaining control of the KRG oil sector, according to two sources. Both firms have declined to comment.

The KRG has repeatedly rejected the federal court ruling. On June 5, the KRG's ministry of natural resources filed a civil suit against the minister of oil in Baghdad, Ihsan Ismael, for sending emails and letters to intimidate oil firms operating in the Kurdistan region and for interfering with the contractual rights of these firms and the KRG, according to a June 13 statement.

Also on June 5, the Erbil court of investigation ruled that the commercial court sessions against international oil firms must be brought to the Erbil court.

There have been years of attempts by the federal government to bring KRG revenues under its control, including local court rulings and threats of international arbitration.

The implications of the latest dispute are not fully clear as more than eight months since elections in Iraq, the formation of a government is still underway.

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Hezbollah Fires about 250 Rockets, Other Projectiles into Israel in Heaviest Barrage in Weeks

Members of the Israeli forces inspect a site following a rocket fired from Lebanon hit an area in Rinatya, outskirts of Tel Aviv, Israel, Sunday, Nov. 24, 2024. (AP)
Members of the Israeli forces inspect a site following a rocket fired from Lebanon hit an area in Rinatya, outskirts of Tel Aviv, Israel, Sunday, Nov. 24, 2024. (AP)
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Hezbollah Fires about 250 Rockets, Other Projectiles into Israel in Heaviest Barrage in Weeks

Members of the Israeli forces inspect a site following a rocket fired from Lebanon hit an area in Rinatya, outskirts of Tel Aviv, Israel, Sunday, Nov. 24, 2024. (AP)
Members of the Israeli forces inspect a site following a rocket fired from Lebanon hit an area in Rinatya, outskirts of Tel Aviv, Israel, Sunday, Nov. 24, 2024. (AP)

Hezbollah fired about 250 rockets and other projectiles into Israel on Sunday, wounding seven people in one of the group's heaviest barrages in months, in response to deadly Israeli strikes in Beirut while negotiators pressed on with ceasefire efforts to halt the all-out war.

Some of the rockets reached the Tel Aviv area in the heart of Israel.

Meanwhile, an Israeli strike on an army center killed a Lebanese soldier and wounded 18 others in the southwest between Tyre and Naqoura, Lebanon's military said.  

The Israeli military expressed regret, saying that the strike occurred in an area of combat against Hezbollah and that the military's operations are directed solely against the fighters.

Israeli strikes have killed over 40 Lebanese troops since the start of the war between Israel and Hezbollah, even as Lebanon's military has largely kept to the sidelines.

Lebanon's caretaker prime minister, Najib Mikati, condemned the latest strike as an assault on US-led ceasefire efforts, calling it a “direct, bloody message rejecting all efforts and ongoing contacts” to end the war.

Hezbollah fires rockets after strikes on Beirut  

Hezbollah began firing rockets, missiles and drones into Israel after Hamas' Oct. 7, 2023, attack out of the Gaza Strip ignited the war there. Hezbollah has portrayed the attacks as an act of solidarity with the Palestinians and Hamas. Iran supports both armed groups.

Israel launched retaliatory airstrikes at Hezbollah, and in September the low-level conflict erupted into all-out war as Israel launched waves of airstrikes across large parts of Lebanon and killed Hezbollah's top leader, Hassan Nasrallah, and several top commanders.

The Israeli military said about 250 projectiles were fired Sunday, with some intercepted.

Israel’s Magen David Adom rescue service said it treated seven people, including a 60-year old man in severe condition from rocket fire on northern Israel, a 23-year-old man who was lightly wounded by a blast in the central city of Petah Tikva, near Tel Aviv, and a 70-year-old woman who suffered smoke inhalation from a car that caught fire there.  

In Haifa, a rocket hit a residential building that police said was in danger of collapsing.

The Palestine Red Crescent reported 13 injuries it said were caused by an interceptor missile that struck several homes in Tulkarem in the West Bank. It was unclear whether the injuries and damage elsewhere were caused by rockets or interceptors.

Sirens wailed again in central and northern Israel hours later.

Israeli airstrikes without warning on Saturday pounded central Beirut, killing at least 29 people and wounding 67, according to Lebanon's Health Ministry.

Smoke billowed above Beirut again Sunday with new strikes. Israel's military said it targeted Hezbollah command centers in the southern suburbs, known as Dahiyeh, where the group has a strong presence.

Israeli attacks have killed more than 3,700 people in Lebanon, according to the Health Ministry. The fighting has displaced about 1.2 million people, or a quarter of Lebanon’s population.

On the Israeli side, about 90 soldiers and nearly 50 civilians have been killed by bombardment in northern Israel and in battle following Israel's ground invasion in early October. Around 60,000 Israelis have been displaced from the country's north.

EU envoy calls for pressure to reach a truce  

The Biden administration has spent months trying to broker a ceasefire, and US envoy Amos Hochstein was in the region last week.

The European Union’s top diplomat called Sunday for more pressure on Israel and Hezbollah to reach a deal, saying one was "pending with a final agreement from the Israeli government.”

Josep Borrell spoke after meeting with Mikati and Lebanese Parliament Speaker Nabih Berri, a Hezbollah ally who has been mediating with the group.

Borrell said the EU is ready to allocate 200 million euros ($208 million) to assist the Lebanese military, which would deploy additional forces to the south.

The emerging agreement would pave the way for the withdrawal of Hezbollah and Israeli troops from southern Lebanon below the Litani River in accordance with the UN Security Council resolution that ended the monthlong 2006 war. Lebanese troops would patrol with the presence of UN peacekeepers.